The future of third-generation networks took a hit last week following NTT DoCoMo’s announcement that it was suspending the introduction of its highly touted 3G network in Japan from May until October. Japan’s largest wireless operator, which many in the industry look to as the benchmark for wireless data services, said it needed the additional time to test the stability of the network.
“The full-scale commercialization of NTT DoCoMo’s 3G services, branded FOMA [Freedom Of mobile Multimedia Access], is now scheduled for Oct. 1, 2001,” the company said in a press release. The carrier noted it planned to launch an “introductory service” to a limited number of subscribers beginning in late May to test the reliability and usability of the network.
“The `introductory service’ will be used to assess the system performance and provide customer feedback for the full-scale launch in October,” DoCoMo said.
The carrier said it would provide free handsets and basic monthly service during the testing period in return for customers filling out questionnaires about the service and offering comments about possible improvements.
While many in the industry were not surprised by the delay announcement, some were skeptical of its timing.
“It’s interesting that they waited until the end of April to announce the delay,” said Kelly Quinn, senior analyst with Aberdeen Group.
Quinn noted DoCoMo must have known about the possibility for a delay well before the announcement, and wondered why the carrier would wait until a month before its scheduled introduction to break the news.
The delay comes on the heels of rival Japanese operator J-Phone pushing back the introduction of its wideband CDMA-based 3G service from later this year to mid-2002. Second-ranked KDDI Corp., which is using a cdma2000 1x-based 3G network, has said it is sticking with its plans to offer a 2.5G service by October, with a speedier 3G network due for fall of next year.
DoCoMo said the delay would do little damage to the company’s bottom line since it expected to add around 150,000 subscribers during its first year of operation. The carriers i-mode service, a 2G service running at 9,600 kilobits per second, currently has more than 20 million subscribers and is the envy of most operators worldwide.
Some analysts also pointed out the delay would only set back DoCoMo’s 3G plans a few months, a small time frame in the big picture of 3G networks.
“As long as it gets into the market by the fourth quarter, there should be no reason for concern,” said Larry Swasey, senior vice president of communications research for Allied Business Intelligence Inc.
While the delay was unfortunate, many applauded DoCoMo’s decision, noting the carrier could not afford to launch its network without ensuring the quality of the product.
“It’s true, the world is looking to Japan as sort of the barometer of 3G’s global potential,” said Elizabeth Harr Bricksin, vice president of global mobile wireless research at the Strategis Group. “However, any negative impact this delay might have on the 3G community pales in comparison to what would have happened if DoCoMo had pushed for the launch before it was truly ready. What the world needs, and indeed what the 3G community needs, is a flawless launch with the complex issues ironed out.”
In addition to continued testing of its network, many said the delay had to do with the predicted lack of handsets scheduled to be on the market by May. Bricksin noted Matsushita recently stated it could use the additional time to meet its handset production goals.
“There is a synergistic effect between handset availability and network launch success,” Bricksin said. “These handsets absolutely must be available, and they must work.”
The Global mobile Suppliers Association, also supported the delay, explaining the introduction of 3G services was a massive undertaking that should not be taken lightly.
“We regard DoCoMo’s decision as representing a wholly sensible approach, on the basis that they are determined to ensure that the required stability is matched by sufficient coverage and capacity to support their service offerings, before the full commercial launch,” GSA said in a statement.
Others have placed some of the blame for the delay on complications in the network-wideband-CDMA-DoCoMo chose for its 3G service. UBS Warburg explained in a report that given the complexity of W-CDMA and the fact that DoCoMo was developing much of the communications software for the system, it was not surprised by the delay.
“I think it is another sign that there are more problems with the technology than originally planned,” said Quinn.
Any problem with W-CDMA technology could ripple throughout the rest of the world as all of the European operators and some U.S.-based carriers have made plans to migrate to 3G using the W-CDMA protocol. Fortunately, for most of the operators looking to implement W-CDMA, their scheduled launch dates are still more than a year away.
“The news doesn’t have any effect on us at all,” said Ritch Blasi, spokesman for AT&T Wireless Services Inc. “We laid out our schedule when we were going to deliver 2.5G and 3G, and are still on track with those dates.”
AT&T Wireless, which has a financial arrangement with DoCoMo to bring i-mode type services to the United States, has said it plans to implement W-CDMA into its network sometime in 2003.
For the U.S. operators with plans to use rival technology cdma2000 1x for their 3G networks, including Verizon Wireless and Sprint PCS, the DoCoMo announcement re-affirmed their technology choice.
“We’re more confident than ever of our decision to implement 1x services for our 3G network,” said Andrea Linskey, executive director of public relations at Verizon Wireless.
The United States’ largest wireless operator is expected to be the first U.S. carrier to introduce 3G services on its CDMA network later this year, and may even beat DoCoMo to the punch. Sprint PCS also has plans to rollout 1x services by the end of the year.
“As for American carriers, I don’t believe that their success hinges on that of NTT DoCoMo’s. Nor do I believe that the mentality is such,” Bricksin said. “While it’s true that every carrier in the world is watching Japan, no single carrier is deluded into thinking that the rollout of a true 3G network is going to be as simple as doling out the [capital expenditures], announcing the launch, et voila, it’s done.”
European operators have recently had to re-adjust the timing of their 3G network introductions, though many believed that had to do more with the costs of the networks than any technological problems.
“We do not believe the situation in Japan will have any bearing on the deployment of 3G system in Europe,” UBS Warburg said. “We believe DoCoMo’s 3G-rollout timetable was too aggressive and unlikely to be achieved in the first place. Our view is that the realistic timetable for the deployment of 3G commercial services in Europe is not expected to commence until the end of 2002 and more likely in 2003.”
UBS Warburg also noted the vendors developing equipment for European operators are working on an advanced version of the 3GPP specification for W-CDMA than what DoCoMo has implemented for its field trial.
“This is not to say that there will not be any software issues; there almost certainly will be,” UBS Warburg said.
While DoCoMo’s delay should not signal long-term problems with 3G services, it does put the wireless industry on notice that there are still problems that need to be ironed out before high-speed wireless networks are ready for prime time.
